Irrevocable Trust
What Is an Irrevocable Trust?
An irrevocable trust is a trust that generally cannot be modified, amended, or revoked after it is created. Once assets are placed in an irrevocable trust, they are typically no longer controlled by the person who created the trust.
The trust is managed by a trustee, who follows the terms outlined in the trust agreement.
Assets placed in an irrevocable trust may include:
- Investments
- Real estate
- Insurance policies
- Cash or other property
Why It Matters
Irrevocable trusts are often used for long-term financial planning and asset protection.
They may help:
- Protect assets for beneficiaries
- Support long-term wealth management
- Establish clear rules for asset distribution
Because the trust cannot easily be changed, careful planning is essential before creating one.
How Irrevocable Trust Works
Once the trust is established and funded, the trustee manages the assets according to the trust agreement.
Example: A grandparent may establish an irrevocable trust for grandchildren, directing the trustee to distribute funds for education expenses.
The trust continues operating according to those instructions even after the trustor’s death.
Irrevocable Trust vs Revocable Living Trust
Irrevocable Trust → Cannot easily be changed once created
Revocable Living Trust → Can be modified or revoked during the trustor’s lifetime
Each trust structure offers different levels of flexibility and control.
FAQs About Irrevocable Trust
Why would someone create an irrevocable trust?
It can provide long-term structure for managing assets and supporting beneficiaries.
Can the creator control the trust assets?
Usually not. The trustee manages the assets.
Can beneficiaries be changed?
Typically no, unless specific provisions allow it.
Related Terms
